WRITING THE BOOK ON AMERICA'S PAST AND FUTURE AS A SUPERPOWER

By DAVID WARSHBy DAVID WARSHJuly 25, 1990

Perhaps the most overlooked book of the summer is Henry Nau's unappetizingly titled, "The Myth of America's Decline: Leading the World Economy into the 1990s." Even in its best passages, it's not exactly fun to read.

But in its concentration on the economic underpinnings of the emerging world order, its sharp judgments about international cooperation since Bretton Woods, its cool-headed prognostications of the future -- in short, in its insistence on attention to the narrative thread that has united Americans, Russians, Germans and the Japanese since the end of World War II -- it is probably a better guide than the others to the shape of things to come. Nau's book argues that America remains the only genuine superpower in the world. To regain its self-confidence, he argues, it mainly needs to resume living up to its economic responsibilities.

Nau is a professor of political science and associate dean at George Washington University who has served in three administrations. For him, the central story since the end of World War II is one of increasing global economic integration. He correctly observes that Reagan was the president who most firmly believed that ideas mattered; but without the convictions of a true Reaganaut, he is free to trace the history of American leadership since 1944 in a relatively dispassionate and well-informed way.

In "The Myth of America's Decline" Nau hasn't sought to integrate journalistic color and mood-mongering into his account of the policy decisions, which range from vapid international conferences to the world-building intricacies of the Marshall Plan. Instead, he's simply laid out the history of the choices American leaders have made over time in the realm of international economic cooperation. His book is a history of laws and institutions in a dozen countries, monetary crises, summit meetings, influential studies and false trails in what he calls the "policy cocoon," a place where politicians, professionals and journalists go about their consensus-building business.

In a month during which Richard Nixon was lionized by three former presidents at the opening of his Yorba Linda library, it is nothing less then dazzling to consider the record of Nixon's foul-ups in the economic realm that are recorded here, especially those of Treasury secretary John Connally and chief international economist Peter Peterson. To read Nau is to realize how much Nixon's famous line -- "I don't give a {expletive} about the lira!" -- was raised to the level of principle in his administration. The conduct of his economic policy was like the wine policy at his table, on which he kept one good bottle for himself and served house wine to everyone else: It wasn't a stance calculated to endear him to the larger world, no matter what those ex-presidents say.

Having gradually abandoned the three-part Bretton Woods policy of price stability, flexible markets and freer trade, the Johnson and Nixon administrations set the stage for the turmoil of the 1970s, Nau argues. OPEC wouldn't have happened so abruptly without the backing off that started in the mid-1960s, he says; the extreme American fiscal self-indulgence in the 1980s wouldn't have been possible without floating rates.

So restoring the Bretton Woods policy triad is the task at hand now, according to Nau -- far more than issues of wealth and class, it is what American politics should be about. "America leads today, less by sheer size of resources, than by its domestic purposes and procedures, which are widely admired and increasingly emulated around the world," he writes. "In short, America leads by knowing what it stands for politically and by getting its house in order economically."